My favorite highlights
from Organizational Physics by Lex Sisney.
An organization is a complex
adaptive system with a finite amount of energy.
How an organization manages its available energy is what ultimately
determines its failure or success.
The
laws of organizational physics show that success is a function of two
things: integration over entropy.
·
Integration indicates the amount
of new energy made available to the organization from
the environment.
·
Entropy indicates the amount of energy
required to manage the “mass” (maintaining the organization,
making decisions, and getting the work done).
Everything naturally falls apart over time. Energy flows here first. If too much energy is lost, the organization
slows down and fails.
Key Steps to System Energy
Management:
1. Build
and manage powerhouse teams
2. Choose
the right strategy
3. Execute
fast
Leveraging Forces:
Every
individual expresses their own unique combination of the four forces that
operate within us: Producing, Stabilizing, Innovating, and Unifying. Each of us has all four forces present in some
form, but usually one or two come to us most naturally. When one force is particularly strong, one or
more of the other forces will be relatively weak. When we operate from our genius zone, we
experience high energy gains, feel deep engagement, high personal satisfaction,
and elevated productivity.
Getting
people in the right roles is key for the benefit of the individual as well as
the organization. Designing the overall
structure in a system that leverages these natural forces to create overall balance
maximizes the benefit to the whole.
1. There’s
an inherent conflict between autonomy and the need for control. Enable sales to sell without restriction (to
speed growth) and centralize functions which control systemic risk (to protect
the system). Make the most of these energies with a structure that harnesses both of them.
2. Functions
focused on effectiveness should never report to functions based on efficiency.
3. Functions
focused on long-range developments should never report to those that drive
daily results.
The 6 Laws of Organizational
Physics
1. An
organization is a complex adaptive system.
It must be viewed as a complete system to gain insights into how it
functions in its totality.
2. An
organization is subject to the first law of thermodynamics: there is a finite
amount of energy. If an organization has
a high level of integration between its capabilities and the opportunities in
the environment, the organization can receive an abundance of new energy and be
successful. If there’s no integration
between them, then there’s no new energy created, and it will soon perish.
3. An
organization is subject to the conditions of its environment. The driving principle of evolution shows that
it’s not the strongest or most intelligent that survive, but those that are
best adapted to their environment.
Because the environment is always changing, the organization must always
be adapting. Successful adaption
requires constant realignment among the organizations capabilities to execute,
its markets or customers, and its products.
This is the basis of its strategy.
4. An
organization is subject to the laws of motion.
How an organization manages its mass determines the speed of its
execution.
5. An
organization must shape and respond to its environment and do so as a whole
system, including its parts and sub-parts.
An organization has patterns or forces that exist all throughout it,
from the smallest tasks and behaviors to the largest enterprise. These forces can be mapped many ways.
6. An
organization is subject to the second law of thermodynamics. Everything falls apart over time due to
entropy (disorder or disintegration). An
organization’s available energy first flows to manage and counter the
disintegrating force of entropy. If
entropy is high, then it costs the system a higher amount of its available
energy to maintain itself and get work done.
If a business has a great market opportunity but suffers from high
internal friction, politicking, and fighting, it takes a tremendous amount of
energy to get any work done and the business can’t capture the external
opportunity as a result.
Reference:
·
Organizational
Physics book by Lex Sisney
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